SPONSORS AS PROPERTY MANAGERS, P.2

 

Greenspun is quick to add that his firm represents several buildings where a sponsor-related entity serves as property manager, and the arrangement has worked well for many years. What counts ultimately, he says, is not who is managing the property, but how well they are managing it.

Sometimes, you get what you want without even having to ask. In late July, Penmark announced it was voluntarily ending its role as managing agent at Ferry Point Park Condominum (although the company still lists it as an active account on the Penmark website). Friedman says he is now trying to sell Penmark's 11 apartments. "They did us a big favor by terminating their contract," Barinas says.

After Penmark stepped down, the board got busy interviewing four management companies and eventually hired Solstice Residential Group, a company founded in July 2008 by Alex Kalajian, who has 20 years of experience managing co-ops and condos.

The most common problems in sponsor property-managers, he says, are disputes over defects in new construction, conflicts over billing and the collection of transfer fees., a.k.a. flip taxes. "If the sponsor is in control of managing the cash assets, it's not necessarily in the best interests of the condo as a whole," Kalajian says. "For example, late fees. You don't know if a sponsor-manager will bill themselves."

Kalajian adds that Penmark was cooperative about passing along documentation and paperwork, and the transition has been "reasonable and fair."

Kalajian's top priority was to produce a budget, which he submitted to the full board in late November. He then put his insurance broker to work trying to figure out a way to reduce the high insurance costs. The board plans to hire an independent auditor to look over the work of a CPA hired by Penmark.

"An audit has never been done before," says Barinas. "We want to do an audit to make sure that Penmark was doing things properly. There are too many questions and too few answers."

By year's end, the unit-owners of Ferry Point could feel a fresh breeze blowing in from the nearby waters where Long Island Sound funnels into the East River.

"The transformation has started," Kalajian says. "The place just needs some attention and loving care."

 

Adapted from Habitat March 2010. For the complete article and more, join our Archive >>

Photos by Tom Soter